For obvious reasons, I've been getting a lot more reader e-mail than I used to. Which is great, except that I'm now way behind in answering. So here's a good one one from a week ago that has only gotten more relevant with the passage of time:

One of the economic issues that really disturbs me is the movement in gasoline prices. Over the last 18 months oil prices rocketed upwards, and then fell sharply. ... You would expect gasoline prices to show the same pattern. However this has not been the case.

In Q4 of 2007, oil prices were around $90 per barrel. Today's oil price is about the same. In Q4 of 2007, gasoline prices were in about $3 per gallon. Today we pay an average of $3.50 per gallon.

In simple terms, it appears that we are paying $.50 too much for each gallon of gas. Yet I do not hear/see anyone talking/writing about this. Are we simply being robbed by the industry that provides our gasoline? Is there a legitimate reason that gas pricing has remained higher than you might expect?

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As already noted here, FT economics columnist Martin Wolf has a new book out called Fixing Global Finance. It's not really about the current crisis, but it is about the giant imbalances in global capital flows that Wolf thinks were the biggest cause of the current crisis. I went to a breakfast with Wolf on Thursday, and he explained with characteristic Wolfian clarity that what set it all off was the Asian financial and economic crisis that began with the collapse of the Thai baht in the summer of 1997.

As local currencies tanked all over Southeast and East Asia, corporations and banks that had borrowed in dollars suddenly stood no chance of repaying their loans. The lesson that these countries--and China, which survived the 1997-98 scare but only just barely--drew from the experience was not just to stop borrowing in dollars but to stop borrowing from the rest of the world, period.

"These were the world's natural capital recipients," Wolf said. "Instead, they started to export capital in a big way." Add that to perennial capital exporters Japan and Germany, and oil-exporting countries that were getting ever flusher as crude prices rose, and you had a vast, sloshing wave of money that ended up flowing to the countries with the most "elastic" banking systems--the U.S., the U.K., Australia, Spain--and financing spectacularly unsustainable house-price booms. (And there are people who want to blame this whole thing on the Community Reinvestment Act?!?)

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